Honeywell Revises Forecast, Citing Pension Change

Honeywell International is changing its approach to pension accounting to more closely match that of its fellow diversified U.S. manufacturers, a move that will make its profit forecasts more comparable to that of its peers.

As a result of that change, the world's largest maker of cockpit electronics revised its forecast 2010 earnings to about $1.86 per share, down from its previous forecast of $2.52 per share. The company said the revision only reflected the changed accounting policy, not any change in performance.

Honeywell said Tuesday it will begin booking gains and losses in its pension portfolio as they occur, rather than smoothing them over a three-year period. The new method is called mark-to-market accounting.

"Today, Honeywell pension accounting is not comparable to that of our peers," said Chief Financial Officer Dave Anderson on a conference call with analysts. "We think this approach will provide better clarity to you regarding Honeywell's underlying performance."

The Morris Township, New Jersey-based company has reported declining earnings through 2010 as a result of its approach to pension accounting, unlike its industrial peers United Technologies , 3M and Caterpillar .

Honeywell International is changing its approach to pension accounting to more closely match that of its fellow diversified U.S. manufacturers, a move that will make its profit forecasts more comparable to that of its peers.
As a result of that change, the world's largest...